Obtaining an EPCG License under India’s Export Promotion Capital Goods (EPCG) Scheme is one of the most effective ways to import capital goods at zero customs duty and boost your export capacity. This comprehensive, step-by-step guide walks you through the entire procedure as of 2026, with the latest policy updates and practical insights for exporters, manufacturers, and service providers.
What is the EPCG Scheme?
The EPCG Scheme (Export Promotion Capital Goods Scheme) is a flagship incentive under India’s Foreign Trade Policy that allows exporters to bring in capital goods — including machinery, tools, and equipment — at zero or concessional customs duty. In return, you must meet a stipulated Export Obligation (EO), typically equal to six times the duty saved, within a defined period (usually six years).
This scheme plays a critical role in enhancing India’s manufacturing competitiveness by enabling businesses to access advanced technology without heavy upfront duty costs.
Why Getting an EPCG License Matters
An EPCG License empowers a business to import capital goods for pre-production, production, and post-production purposes without paying customs duty, provided the export obligations are met. Once the EO is fulfilled, you can obtain an Export Obligation Discharge Certificate (EODC) — the final certificate that discharges your liabilities under the scheme.
Many businesses also engage EPCG Consultants to help manage documentation, reduce errors, and ensure timely fulfillment of obligations.
Step-By-Step Procedure to Obtain an EPCG License
Here’s a detailed, practical walkthrough of the application and compliance journey:
1. Check Your Eligibility
Before beginning the application process, confirm that your business is eligible for the EPCG Scheme. Eligibility typically includes:
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You must be a registered exporter in India.
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A valid Import Export Code (IEC) is mandatory.
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You should have export potential or actual export performance.
Unlike some other DGFT schemes, there is no minimum export threshold, but having export history and financial records improves your chances of approval.
2. Prepare Required Documents
Successfully applying for an EPCG License requires a set of precise documents. Ensure all are complete and self-attested:
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Import Export Code (IEC)
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Registration-cum-Membership Certificate (RCMC)
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GST Registration Certificate and PAN Card
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Proforma Invoice or Purchase Order of capital goods
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Chartered Engineer Certificate and CA Certificate
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Power of Attorney or Board Resolution (if required)
These are the core documents your application must include when submitting on the DGFT portal to avoid delays or deficiency notices.
3. Apply Online Through the DGFT Portal
Access the official DGFT online platform and follow this procedure:
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Log in with your credentials and Class-III Digital Signature Certificate (DSC)
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Select “Services → Online E-COM Application”
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Choose EPCG (0%) Scheme
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Fill in details such as business information, capital goods to be imported, and Export Obligation
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Upload all supporting documents and pay the requisite fees
After submission, you will receive an application number. Keep this for tracking and communication with the licensing authority.
4. Pay Government Fees
Once the application form and documents are uploaded, pay the prescribed DGFT government fee online via net banking or card payment. The fee is generally based on the CIF (Cost, Insurance, and Freight) value of the capital goods.
5. DGFT Review and License Issuance
After application submission, DGFT officers will review your application. If any clarification or deficiency is noted, you may receive a notification requiring additional documents or corrections.
Upon approval, the EPCG License will be issued electronically. This is a critical milestone — the license authorizes you to begin duty-free capital goods import.
6. Register the License with Customs
Registration of your EPCG License at the designated Customs port is mandatory before clearing your imported capital goods. Customs will typically ask for:
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Bond or Bank Guarantee for the duty saved
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License details and supporting identification documents
Once registered, you can import your capital equipment without customs duty.
7. Import and Install Capital Goods
After import:
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Ensure capital goods arrive within 18 months of the EPCG License issuance.
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Install the machinery at your declared address.
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Obtain the Installation Certificate from the jurisdictional Customs officer or an independent Chartered Engineer. This confirms the machinery is installed and ready for production.
Note: Policy updates in recent years have eased timelines — the installation certificate can now be submitted within three years of import instead of six months, enhancing compliance flexibility.
8. Fulfill Export Obligation
Under the EPCG Scheme, you are required to fulfill an export obligation equal to six times the duty saved on imported capital goods within six years from the license date. You can meet this obligation through:
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Direct exports of products manufactured using the imported machinery
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Deemed exports (such as supplies to SEZ or EOU units)
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Third-party exports with proper documentation
Maintain accurate export records, shipping bills, and Bank Realization Certificates (BRCs) to support your EO fulfillment.
9. Apply for Export Obligation Discharge Certificate (EODC)
Once you meet your export obligations:
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Apply online for the Export Obligation Discharge Certificate (EODC) through the DGFT portal using Form ANF 5B.
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Upload export documents (shipping bills, BRCs) and the Installation Certificate.
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DGFT will issue the EODC after verification.
This certificate officially confirms that you have fulfilled your EPCG export obligations and can close your license.
10. Customs Bond Cancellation
After receiving your EODC, submit it to Customs to:
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Cancel your bond or bank guarantee
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Complete the closure process
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Avoid future liabilities under the EPCG Scheme
This final step formally closes your EPCG compliance requirements.
Tips for Success and Avoiding Common Mistakes
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Ensure all documents are accurate, self-attested, and complete before submission.
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Maintain meticulous records of imports, exports, and payments.
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Work with experienced EPCG Consultants if you are unfamiliar with DGFT procedures.
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Monitor timelines closely to satisfy installation and export obligation deadlines.
Conclusion
The path to securing and successfully managing an EPCG License is structured but detailed. With proper planning, careful documentation, and consistent export performance, you can leverage the EPCG Scheme to reduce import costs and significantly enhance your export competitiveness.
Whether you are a seasoned exporter or a growing manufacturer, understanding each step — from initial application to EODC — is vital. For professional support and guidance through this complex journey, partnering with experts like Exim Advisory can streamline your compliance and improve your approval success rate.
